Will UK banks ever recover?
As we look at the unbelievable scenario of the vast majority of UK banks potentially being nationalised over the coming weeks and months there are serious concerns that the UK banking sector is holed below the waterline. There are real worries that if the vast majority of the UK banking system is nationalised it could literally take decades for the system to be put back in order and handed over to shareholders again.
The UK government has already bailed banks out to the tune of tens of billions of pounds although this money appears to have disappeared into the black hole which is the UK economy. There is no way the government can instigate a rescue package part three without taking the banks under national control and ensuring that market liquidity is increased at this most vital of times. However, this move would totally obliterate the free market economy which has been the basis of the UK economy for many years and there are fears it could take decades to return to "normal".
The current economic downturn, the like of which has never been seen before, has the potential to destroy not only the UK banking system but many major banking systems around the world. Quite how governments will then be able to afford to fund business and personal banking services remains to be seen.
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